Japan was and remains a key player in economic cooperation in the Asia Pacific. It was vital in rescuing the Trans-Pacific Partnership (TPP) and forming its replacement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Although Japanese leadership was absent in Port Moresby, the country has the potential to lead APEC in underdeveloped policy areas.
Japan was an active supporter of Australian prime minister Bob Hawke’s proposal for multilateral economic cooperation in the Asia Pacific in the 1980s. And since the establishment of APEC in 1989, Japan has played a leading role in its development. Japan has hosted APEC twice, and the 1995 Osaka Action Agenda became the roadmap for meeting the 1994 Bogor Goals — a set of targeted goals outlined by APEC member countries for realising free and open trade in the Asia Pacific. For Japan in the 1990s, APEC was the key mechanism for facilitating trade and investment liberalisation and economic development in the region.
While Japan’s commitment to economic cooperation has not changed, its approach to trade liberalisation has gradually shifted away from APEC. In the 2010s, domestic policy voices presented the TPP as a promising vehicle for Japan’s future economic prosperity. The Japanese government supported this perspective and pursued the TPP’s realisation despite strong domestic opposition, particularly from the agricultural sector.
For a period, debate on trade liberalisation in Japan was polarised between pro and anti-TPP groups. Although divided, this debate steered policy focus towards the TPP and helped the agreement became the leading symbol of trade liberalisation in Japan. Recognition of APEC as a way to enhance trade liberalisation gradually weakened as a result.
Is the marginalisation of APEC in Japanese trade policy debate reversible? The answer is hopefully yes, but this depends upon Japan’s political will to find and use the opportunities that APEC provides — particularly for Japan’s declining regional leadership role.
Japan should recognise that APEC’s comprehensive framework — beyond the trade and investment liberalisation and facilitation (TILF) project — provides possibilities for the reinvigoration of Japanese leadership. In some policy areas such as small and medium enterprise (SME) growth, human resource development and labour mobility, Japan has the advantage of prior experience. Developing these policy areas would also serve Japan’s present economic needs.
Japan has extensive experience in the development of SMEs. The majority of Japanese workers are employed by SMEs — a fact that has not changed since the early period of Japan’s economic development. The country is well positioned to provide the necessary knowledge and skills for the development and regulation of SMEs in the region.
While human resource development and labour mobility are engines for economic development in the region, they are also among Japan’s present economic concerns. The country needs foreign workers and immigrants to maintain its current economic and social welfare standards. Japan’s contribution to these policy areas would also help to stabilise APEC leadership and balance against great power rivalry over the TILF agenda.
Japan should also become active in revitalising civil society participation in APEC working groups (WGs). The political impact of WGs may not be strong enough to change APEC at the moment, but WG meetings are useful for creating policy debates at the non-governmental level. Strengthening this framework would not only ease consensus-building on APEC policies between national governments and their populations, but also help to reform APEC from the grass-roots level with revised agendas in new policy areas.
Japanese civil society groups’ participation in APEC WGs is limited, and the government should encourage their participation and leadership. Civil society participation will enhance Japanese domestic support for APEC activities. And more importantly, Japan’s successful post-war experience with democracy puts it in the best position to promote civil society participation in APEC to non-Western members.
Japanese policy debates are moving towards an emphasis on rules-based trade and investment liberalisation rather than consensus-based APEC schemes. But APEC’s role is not limited to these schemes. Policy areas such as SME growth, human resource development and labour mobility may be secondary to trade liberalisation, but they provide the necessary foundations for a lasting liberalisation process.
The rise of China and the roadblock of US–China tensions are gradually eclipsing Japan’s ‘natural’ leadership in Asia Pacific economic cooperation. But by building on its strengths in economic policy and long-standing commitment to multilateralism, Japan can reinvigorate its position and APEC in the process.
Toshiya Takahashi is Associate Professor at Shoin University, Japan and a member of the APEC Study Centre in Japan.
This essay is dedicated to Professor Ippei Yamazawa, long-time inspiration to and father of the study of APEC in Japan. Professor Yamazawa passed away in Tokyo on 16 November. He will be missed by his many friends across the APEC region.
As Japan’s Diet just passed some legislation on increasing the number of foreign workers over the next 5 years the comments in this analysis about Japan demonstrating leadership in human resources and labor mobility are timely. Given that it is projected that the country will lack about 1.6 million workers in the next 20 years or so the 340,000 that this legislation will allow to enter the country is merely a drop in the proverbial bucket, so to speak. But it could potentially lead to other, more sweeping changes in the years to come IF PM Abe and his party institute the kinds of language training and social services needed to try to ensure that these foreign workers and their family members can make a successful transition to life in Japan. This along with the stubbornly low birth rate in the country might encourage/necessitate that its leaders open up to more immigration. The opportunity for other APEC members to learn from this experience could be great.
Abe’s track record on his so called Womenomics and Equal Pay for Equal Work is much less stellar. Per many pundits, these have been largely PR campaigns with little real substance behind them. They still offer the chance, however, for him to demonstrate some leadership for APEC members if/when he might decide to institute some substantial changes.